6 Applied Performance Practices McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, Inc All rights reserved Applied Performance Practices at Nucor Courtesy Nucor Nucor has survived and thrived in the turbulent steel industry through the benefits of performance-based rewards, job design, and empowerment McShane/Von Glinow OB4e Slide 6-2 © 2008 The McGraw-Hill Companies, Inc All rights reserved Financial Reward Practices • Money has multiple meanings – Symbol of success – Reinforcer and motivator – Source of reduced anxiety • Meaning of money varies – Higher value to men than to women – Cross-cultural differences © Corel Corp With permission McShane/Von Glinow OB4e Slide 6-3 © 2008 The McGraw-Hill Companies, Inc All rights reserved Types of Rewards in the Workplace • • • • Membership and seniority Job status Competencies Performance-based © Corel Corp With permission McShane/Von Glinow OB4e Slide 6-4 © 2008 The McGraw-Hill Companies, Inc All rights reserved Membership/Seniority Based Rewards • Fixed wages, seniority increases • Advantages – Guaranteed wages may attract job applicants – Seniority-based rewards reduce turnover • Disadvantages – Doesn’t motivate job performance – Discourages poor performers from leaving – May act as golden handcuffs McShane/Von Glinow OB4e Slide 6-5 © 2008 The McGraw-Hill Companies, Inc All rights reserved Job Status-Based Rewards • Includes job evaluation and status perks • Advantages: – Job evaluation tries to maintain pay equity – Motivates competition for promotions • Disadvantages: – Employees exaggerate duties, hoard resources – Focuses employees on own jobs, not customers – Inconsistent with workplace flexibility McShane/Von Glinow OB4e Slide 6-6 © 2008 The McGraw-Hill Companies, Inc All rights reserved Competency-Based Rewards • Pay increases with competencies acquired and demonstrated • Skill-based pay – Pay increases with skill modules learned • Advantages – More flexible work force, better quality, consistent with employability • Disadvantages – Potentially subjective, higher training costs McShane/Von Glinow OB4e Slide 6-7 © 2008 The McGraw-Hill Companies, Inc All rights reserved Performance Pay at Hugo Boss Hugo Boss Industries (HBI) attributes relies on a balanced scorecard that captures diverse performance measures across the Swiss company’s various product groups “The scorecard serves a very important purpose in focussing attention on the things that are being measured and where we are trying to go,” explains Werner Lackas, HBI’s head of operations McShane/Von Glinow OB4e Slide 6-8 © 2008 The McGraw-Hill Companies, Inc All rights reserved Performance-Based Rewards • Organizational • • rewards • Profit sharing Stock ownership Stock options Balanced scorecard Team • Bonuses rewards • Gainsharing • Bonuses Individual • Commissions rewards • Piece rate McShane/Von Glinow OB4e Slide 6-9 © 2008 The McGraw-Hill Companies, Inc All rights reserved Evaluating Organizational Rewards • Positive effects – Creates an “ownership culture” – Adjusts pay with firm's prosperity – Scorecards align rewards with several specific organizational outcomes • Concerns with performance pay – Weak connection between individual effort and rewards – Reward amounts affected by external forces McShane/Von Glinow OB4e Slide 6-10 © 2008 The McGraw-Hill Companies, Inc All rights reserved Evaluating Job Specialization Advantages • Less time changing activities • Lower training costs • Job mastered quickly • Better person-job matching McShane/Von Glinow OB4e Disadvantages • • • • • Slide 6-14 Job boredom Discontentment pay Higher costs Lower quality Lower motivation © 2008 The McGraw-Hill Companies, Inc All rights reserved Job Characteristics Model Core Job Characteristics Critical Psychological States Outcomes Work motivation Skill variety Task identity Task significance Meaningfulness Autonomy Responsibility General satisfaction Feedback from job Knowledge of results Work effectiveness Growth satisfaction Individual differences McShane/Von Glinow OB4e Slide 6-15 © 2008 The McGraw-Hill Companies, Inc All rights reserved Job Rotation • Moving from one job to another • Benefits Job ‘A’ – Minimizes repetitive strain injury – Multiskills the workforce – Potentially reduces job boredom McShane/Von Glinow OB4e Job ‘B’ Job ‘D’ Job ‘C’ Slide 6-16 © 2008 The McGraw-Hill Companies, Inc All rights reserved Job Enlargement • Adding tasks to an existing job • Example: video journalist Traditional news team Video journalist Employee Operates camera • Operates camera • Operates sound • Reports story Employee Operates sound Employee Reports story McShane/Von Glinow OB4e Slide 6-17 © 2008 The McGraw-Hill Companies, Inc All rights reserved Job Enrichment Given more responsibility for scheduling, coordinating, and planning one’s own work Clustering tasks into natural groups – Stitching highly interdependent tasks into one job – e.g., video journalist, assembling entire product Establishing client relationships – Directly responsible for specific clients – Communicate directly with those clients McShane/Von Glinow OB4e Slide 6-18 © 2008 The McGraw-Hill Companies, Inc All rights reserved Kambuku Empowerment Pretoria Portland Cement introduced “Kambuku”, a companywide initiative that made the South African company more performance-oriented through employee empowerment Courtesy Pretoria Portland Cement McShane/Von Glinow OB4e Slide 6-19 © 2008 The McGraw-Hill Companies, Inc All rights reserved Dimensions of Empowerment Selfdetermination Meaning Employees believe their work is important Competence Employees have feelings of selfefficacy Impact McShane/Von Glinow OB4e Employees feel they have freedom and discretion Employees feel their actions influence success Slide 6-20 © 2008 The McGraw-Hill Companies, Inc All rights reserved Supporting Empowerment • Individual factors – Possess required competencies, able to perform the work • Job design factors – Autonomy, task identity, task significance, job feedback • Organizational factors – Resources, learning orientation, trust Courtesy Pretoria Portland Cement McShane/Von Glinow OB4e Slide 6-21 © 2008 The McGraw-Hill Companies, Inc All rights reserved Self-Leadership • The process of influencing oneself to establish the self-direction and self-motivation needed to perform a task • Includes concepts/practices from: – Goal setting – Social learning theory – Sports psychology McShane/Von Glinow OB4e Slide 6-22 © 2008 The McGraw-Hill Companies, Inc All rights reserved Elements of Self-Leadership Personal Goal Setting Constructive Thought Patterns Designing Natural Rewards SelfMonitoring SelfReinforcement • Personal goal setting – Employees set their own goals – Apply effective goal setting practices McShane/Von Glinow OB4e Slide 6-23 © 2008 The McGraw-Hill Companies, Inc All rights reserved Elements of Self-Leadership Personal Goal Setting Constructive Thought Patterns Designing Natural Rewards SelfMonitoring SelfReinforcement • Positive self-talk – Talking to ourselves about thoughts/actions – Potentially increases self-efficacy • Mental imagery – Mentally practicing a task – Visualizing successful task completion McShane/Von Glinow OB4e Slide 6-24 © 2008 The McGraw-Hill Companies, Inc All rights reserved Elements of Self-Leadership Personal Goal Setting Constructive Thought Patterns Designing Natural Rewards SelfMonitoring SelfReinforcement • Finding ways to make the job itself more motivating – eg altering the way the task is accomplished McShane/Von Glinow OB4e Slide 6-25 © 2008 The McGraw-Hill Companies, Inc All rights reserved Elements of Self-Leadership Personal Goal Setting Constructive Thought Patterns Designing Natural Rewards SelfMonitoring SelfReinforcement • Keeping track of your progress toward the selfset goal – Looking for naturally-occurring feedback – Designing artificial feedback McShane/Von Glinow OB4e Slide 6-26 © 2008 The McGraw-Hill Companies, Inc All rights reserved Elements of Self-Leadership Personal Goal Setting Constructive Thought Patterns Designing Natural Rewards SelfMonitoring SelfReinforcement • “Taking” a reinforcer only after completing a self-set goal – eg Watching a movie after writing two more sections of a report – eg Starting a fun task after completing a task that you don’t like McShane/Von Glinow OB4e Slide 6-27 © 2008 The McGraw-Hill Companies, Inc All rights reserved Applied Performance Practices McGraw-Hill/Irwin © 2008 The McGraw-Hill Companies, Inc All rights reserved ... reserved Evaluating Organizational Rewards • Positive effects – Creates an “ownership culture” – Adjusts pay with firm's prosperity – Scorecards align rewards with several specific organizational. .. Slide 6-8 © 2008 The McGraw-Hill Companies, Inc All rights reserved Performance-Based Rewards • Organizational • • rewards • Profit sharing Stock ownership Stock options Balanced scorecard Team... performance pay – Weak connection between individual effort and rewards – Reward amounts affected by external forces McShane/Von Glinow OB4e Slide 6-10 © 2008 The McGraw-Hill Companies, Inc All